College will leave you with many things: a high alcohol tolerance, best friends, newfound knowledge, messy relationships, a million memories and debt.
Mountains and mountains of debt. Thanks student loans.
We’ve all heard a student loan horror story. Mine came from my 10th grade science teacher who was in his mid-fifties and still paying off his college debt.
And yes, this happens. Education is expensive, but you’re not alone. Pink & Black asked four college grads to share their own loan stories, and we came up with debt-paying strategies to help. No matter what your debt level is, you don’t have to be buried in college costs for all of eternity.“I’m barely 22 and over $65,000 in debt. My parents didn’t help me with college, because you know, they’re parents of the year. As to how I’m gonna pay it off…. I haven’t thought that far yet. Medical school is gonna be even worse. I won’t be able to work and go to school at the same time like I did senior year, so I’ll be even broker. Gotta love the way the world works.” -Dan Thompson, Emory University ‘15
We recommend treating the loan like a mortgage. If you can afford it, make larger payments to reduce the principal more quickly and lower the amount of interest. Paying double what’s recommended will have it paid off in half the time. Or you can add payments and send in checks every two weeks rather than monthly.
Another trick is to start early. Although some of us simply don’t have the time, a part-time job while in school is a really proactive way to start paying off debt. Managing to put aside, say, $1,000 a month adds up to $12,000 a year.
“I just graduated and I’m around $20,000 under right now. I mean I’m just gonna slowly pay it off I guess. Isn’t that what people do? My income isn’t steady right now. So I don’t know.” -Phoebe Szymanski, Boston College ‘15
We recommend establishing a college repayment fund. If you can save an additional couple hundred bucks and automatically deposit it into a savings account, it can make paying off debt easy and virtually unnoticeable. This is very effective because it’s basically forcing you to set aside money to grow what otherwise would be spent on everyday stuff. Just make sure to set up an account that will be used only for paying back your college debt, so you won’t be tempted to buy new crop tops or shoes with the money.
“I’m almost $100,000 in debt. Did you get that? $100,000. It’s funny how screwed I am. Gonna be paying it off till I have grandchildren. I’m about to be a senior partner at a law firm. Living the dream, but then it’s like, nope, you’re still broke.” -Cameron Abbera, New York University ‘12
We recommend creating a 3-5 year plan. With huge debts like this, along with a stable job, it’s seriously important to have a plan in place. Sit down and figure out exactly when the loan ends. You’ll feel way more comfortable knowing you have a goal in place that you’re committed to. If you know exactly what to pay monthly and how long it will take, it’ll feel like sending in a cable bill.
“I went to grad school to get my master’s in education and got myself $13,000 in debt. At the time I didn’t know that if you take out a loan to be a teacher and then work in a public school for two years they forgive your loan. So now I’m debt free. It’s a great incentive.” -Debra Forrest, Georgia State University ‘11
Okay, Debra is lucky. But before you change your major to education, there are two more powerful debt payoff methods to consider for everything from student loans to car payments:
The Debt Snowball—With the debt snowball method, you pay off your debts in order from smallest to largest, regardless of the interest rate or monthly payment. So you pay the minimum balance on all other debts, but pay whatever extra you can on the smallest debt to get it paid off faster. Then, each time you pay off a debt, you add the payment you were making on it to the monthly payment for the next debt you pay off. Each time you pay off a debt, you’re throwing even more money at the next debt down the line. By the time you get to your largest debt (your student loans probably), you’re making very large monthly payments. If you need a push to stick with debt repayment, this method is for you.
The Debt Avalanche—With this method, you pay off your debts from largest interest rate to smallest interest rate. Pay whatever extra you can on the debt with the highest interest rate, while making the minimum payments on your other debts. When you pay off one debt, you add that payment to the next debt with the next highest interest rate, and so on. This method could potentially save you thousands of dollars over the long term. Getting rid of those high interest debts early can really make a difference. If you know you can stick with paying your debt, regardless of how long it takes, this is the most scientific, money-saving method to use.
See? There are many ways to work around being stuck in a pile of student loan debt until you’re 80. There may not be a single foolproof method to staying debt-free, but there are tons of strategies that can help you manage everything. Loans are there for a reason—don’t let debt be a deal breaker.
Feature Photo via